Is herding a safe haven for investment?

Yi-Chang Chen, Shih-Ming Kuo and Yu-Wen Yang

Applied Economics Letters, 2021, vol. 28, issue 2, 95-99

Abstract: This paper investigates whether herd behaviour followed by fad can be regarded as a safe haven for investment. We found that investors have anticipatory herd behaviour towards the Apple fad. Herding creates a safe zone and is adopted as a means to reduce the risk of irrational behaviour, especially for companies with poor profitability. On the whole, herding may lead to positive market returns and can be used as a short-term safe haven under uncertainty.

Date: 2021
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DOI: 10.1080/13504851.2020.1734180

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